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Bulls and Bears

News/Business. The latest market news; the week ahead on Wall Street. (CC)

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Kentucky 7, Us 6, Tim Kaine 5, Steve Forbes 4, Charles Payne 2, Stu 2, Dnc 2, Nancy Pelosi 2, Connolly 2, Europe 2, Richard Trumka 1, Paul 1, Stuart Varney 1, Jack Conway 1, Ben 1, Steve 1, Charlie 1, Pat 1, Stuart 1, The Nation 1,
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  FOX News    Bulls and Bears    News/Business. The latest market  
   news; the week ahead on Wall Street. (CC)  

    September 4, 2010
    10:00 - 10:30am EDT  

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the show, show. >> after the show, show, foxnews.com and we'll see if he can escape and never let him out if he doesn't escape. >> the>>'s something we've all wanted to do right here. >> there we go. >> have a great saturday and join us in the after the show, show. >> the east coast just dodging a bullet, but the nation is not. because the cat 5 storm is headed this way. brace yourself, it could get ugly. >> welcome everyone, i'm stuart varney we're live for the next two hours because the stakes are so high. for your jobs, your money, and your taxes. it's got the president working overtime this labor day weekend, as democrats scramble to keep their jobs. that's coming up in a moment. but first, the very latest. the president today defending his jobs record, saying his policies have stopped the bleeding. but have they? 814 billion dollars later,
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283,000 jobs lost over the president's recovery summit. big labor gearing up for its jobs powwow on the heels of union boss richard trumka, saying that deficits do not matter. and an interparty democrat revolt is growing. the head of the dnc, tim kaine will be heading the campaign with the leaders of one of the devolt and connolly wants tax cuts extended for everybody, middle class, upper income earners and most of his party does not want that. the congressman is here. and the president is expected to initiate big jobs next week. and trying to get into office to stop the spending, the republican senate candidate in kentucky joins me now. by the way, we reached out to the democratic opponent, jack conway and we've still not heard back from him. rand paul you're not buying any of it. you don't want any new stimulus spending period. >> no, i think the president's
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philosophy is getting in the way of good policy. the president's policy like so many who believe in big government is to either vilify those making over 200,000 and stick them with more taxes or underappreciate what the people who make 200,000 do. those are the people driving the engine. those are the people hiring the people, and it may only be a million folks who make over $200,000 a year and account for 70 to 80% of the job creation and so if he wants to bring back taxes on these people, it will be a disaster in the middle of recession. >> you've heard the argument. stimulus plan one worked, but not very well. so, we need stimulus plan two because the economy is still running very, very slowly. and if we borrow a lot more money now, it doesn't cost very much because the cost of borrowing is at historic lows, you're not buying any of that, either. >> i don't think the american people are. i mean, across kentucky and
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across america, there's an uprising saying that government needs to live within its means. we have a 2 trillion dollar annual deficit, 400 million in interest payments every year and face a day of reckoning, i think that government spending crowds out private spending, the more you give to the federal government the less is left in kentucky to create jobs by small business men and women. >> stuart: do you think if indeed there is a republican sweep in the house and maybe the senate, is there had a chance of a real complete change of course for our economic policy, away from government and government spending, towards private enterprise and investment? >> can we do that? >> i sure hope so. what i'm proposing not just at that we change one party for the other. i think we need structural change. i think both parties have proven themselves to be untrustworthy with regard to balancing the budget. i think the only way they'll do it, the only way we'll restrain the size and growth
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of government is they need to be forced to balance the budget by law, either a constitutional amendment or a very strict rule that they can't' void. >> stuart: that's a long way off, sir. any kind of constitutional change, you're talking a decade. >> well, i disagree. i'm more optimistic. you know, in '97, we passed a balanced budget amendment in the house and we were within one vote in the senate. so, i think you actually could get an amendment. there is a ground swell. i mean, look at the hundreds of thousands of people who are showing up on the mall, to basically say, government, we want to take our government back and we need a government that's restrained, we don't understand why we have to live on a budget and we can't spend more than we take in as individuals and a country can do it and the thing is, we're going to live beneath our means if we continue to live beyond our means. >> stuart: can i just get specific for one moment? it is possible that next week, president obama will bring up a specific proposal and that would be a payroll tax holiday, working the region of
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300 billion dollars over a ten year period. that was originally, a republican eyed. it was the republicans who put that forward, 18 months ago, instead, the president chose to go the spending route as opposed to the tax holiday route. if it was a republican idea 18 months ago, can you still embrace it now, would you be more it now? >> i will be more anything that lowers the tax burden. in fact, i think that's the only thing that government could do to help the economy, the most sustained growth we ever had. the only government stimulus plan that worked was when we reduced marge nat rates and spurred a decade of growth. that's what you need again. you can nt do that without cutting spending so you really have to do both and people typically in washington, they're all for cutting taxes, republicans have done a good job of that, but someone needs to also stand up and say, look, if we're going to cut taxes, it will help, we've got to cut spending or the deficit problem will get worse. >> i want to be real clear
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though, if the president did propose say a 300 billion dollar payroll tax holiday next week, you would be for it and vote for it if you're in that position if it was matched by spending cuts to balance it out. you'd do that? >> absolutely. i will always vote to reduce taxes, but i think we need to do it responsibly by also cutting spending. >> are you seven points ahead of your democratic opponent in the election? >> or maybe more. there are a lot of polls out there and there's going to be a new poll out today that will probably be good for us, so, you know, we're pretty excited about it. the mood of the country is that president obama is wrong on most of the issues of the day. they don't understand why you vilify people who make more than 200,000 when those are the people who hire you, those are the people who create the jobs. and we here in kentucky want more jobs. the president is so wrong on our issues on cap and a trade. cap and trade will destroy jobs in eastern kentucky,
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western kentucky, but also, we have aluminum plants that require cheap electricity. if we get cap and trade, it will devastate our economy. president obama's never even been to kentucky that i know of, and the thing is, he doesn't understand us here and the people in kentucky sense that he's wrong and that he doesn't really care about our jobs in kentucky. and i think that's going to make this really a ground swell for our candidacy. >> rand paul, we appreciate you joining us this saturday, labor day weekend. >> thanks, sir. >> stuart: to the tax cut revolt growing among democrats right now as the elections close in. he may not know it, but in less than 24 hours the head of the democratic national committee will be hitting the campaign trail with a democrat in favor of extending the bush tax cuts for all. why dnc chair tim kaine might want to hear what virginia congressman jerry i connolly just told me in this exclusive. >> i've made the economic argument that raising taxes right now, which is effectively what you do when
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you allow the tax cuts to expire, i think does real damage to a very fragile economic recovery and that's how we ought to look at it. >> stuart: it's a direct split with the president, you and several leading democrats. that's a flat-out split with president obama. >> yes, it is and it's a flat-out split with the democrat leadership in the house of representatives which has steadfastly insisted that these tax rate cuts ought to expire on the upper income bracket. >> stuart: you're in fact running against the leadership of your own party. can you give me any numbers how many other congressmen feel the same way? >> earlier this year, the wall street journal only cited six of us in the house and i think that number is larger today and i'm hopeful that many of my democratic colleagues will put aside sort of ideology and look at the economics of this. >> stuart: well, pretty strong stuff and if pat is right, this democratic revolt is just getting started. the former democratic pollster
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joining me now. pat, i'm using the word revolt. is that too strong, maybe. >> well, not at all. i think, i think some democrats are now, many democrats are trying to run from nancy pelosi and from the president on a number of policies, on-- involving economics, the spending is killing them. and it is in this issue of raising taxes. i was interested to hear what you said about, you know, the president considering a payroll tax cut, which is exactly what i said a year ago, they should have done at the go i think when they're doing the stimulus. their pro em is and the problem of both the democrats and republicans, stuart is what rand paul did say, are they going to cut spending? you cannot just drive up the deficits without cutting spending, and what we need is in the republicans are walking into a trap, i don't know in the democrats, what, can't restrain theirselves. we need to go back to where we were in '08 and even earlier if necessary and cut back to that level of spending. otherwise, public's got to
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take this seriously. democrats are defecting like crazy. >> stuart: that's my point. i was shocked when congressman connolly there, now, this weekend, he is going to go and campaign with dnc chair tim kaine. a man in real-- >> that ought to be, that ought to be pretty funny. >> stuart: but does tim kaine know-- surely tim kaine knows where jerry connolly is coming from, what he's doing my linking himself with a man who wants to extend all of the bush tax cuts. >> look, the democrats want to win right now, they're so-- the tide is so great, they'll accept anything the problem is the public won't. the problem is, the congressmen who voted to make nancy pelosi, who i said more than a year ago was going to drag-- take this party over the side like a stone weight, overboard, it is-- you know, they voted with them. they gave them the key votes and now they're pretending not to. i'm not sure the public is going to buy this. look, part of the problem is,
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yesterday the usa today galluple po. the five, four of them had overwhelming majority opposition, including health care, stimulus. >> stuart: let me bring up health care. as you know, we have the development, and starreded with a democrat in oregon, he wrote, i believe, he had a large part in writing the individual mandate where it says, liao beiook you've got to health care insurance yourself and he's now saying, well, i don't want that mandate. now, look, i've got the little section in my hands here, pat, where-- which points out the mandate where it is, and it occurs to me that if you get rid of that individual mandate, essentially, you're getting rid of this 2000 page health care reform bill, which is sitting right here. now, that's another revolt, isn't it? >> yeah, well, look, the public, and i have said this and wrote this at the time and everybody said, oh, the
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democrats said no, no, you're wrong and people love this thing. they dislike, they hate it. they think it was a crime against democracy and want it expunged. when you have 58 to 60% of the people saying every poll, every week, that they want it repealed, that essentially, what ron widen called for is repealing it. look, we're going to, this thing is going to be killed one way or the other. the public will never be satisfied. i warned my party about jamming this down the public's throat. the notion of this white house, which is a-- and that collective elite snobs who run the democratic party now, rather than being the voice of the common man, is that we will jam down your throat what we think is good for you and you know, and that's tough if you don't like it. >> stuart: let me repeat that. >> they're going to have the party end up blowing apart. >> stuart: you say it's going. i've got 2000 pages of health care reform plan, you say it's going. >> whether it's real or defacto-- let me tell you something, before this is over, that
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health care bill essentially will be repealed. >> stuart: repealed. >> now, people want reform. look, everyone in the country wants health care reform, the problem is you can't sell this, it is a turkey. >> stuart: okay. >> and it was-- look, it was passed that way and the senate bill was passed and everybody knew there were things wrong, but they couldn't take it to congress. >> stuart: i've got to go. >> and the-- >> i've got to go, but i'm shocked that the prize piece of legislation in president obama's first full year in oafs, you say, is lousy, it's gone, it's going to be repealed. >> it's a poison pill. >> stuart: thank you, we've got it. the republicans will win the majority, but still lose, they don't call him the hammer for nothing. why former house majority leader tom delay is warning his party, you better get tough or else. and he's going to be here and we're being kept in the dark on the details of the president's new spending push. guess who is not?
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who says it isn't a problem. we've spent a trillion dollars when you add up the stimulus and the extra government spending, 18 months later all we've got, we're still losing jobs. why do you want to go out there, repeat the exercise, spending more money, run up more debt, why? >> well, we're not losing jobs. i mean, we have seen some job growth and also, let's be honest with it, stuart, we went from 6 1/2% rate of contraction in the economy to growth. okay? so there was in effect-- look, deficits are meaningless, i would go on to stay they're actually virtues because they do two things, deficits add to demand which means we produce more goods and services, that's the real wealth of the nation, okay. >> stuart: all right. >> geraldo: . >> and deficits add to the form of welt in the treasury and the holding for the wealth increases-- >> you're right there.
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you know as well as i do that every month that goes by we at $100 billion dollars to our outstanding national debt. >> where does that go? yes, the government has the negative on it e what are you thinking about this? >> and goes to the holdings of the public. >> stuart: wait, come on, mike. >> no, you come on. >> stuart: and get back to, i want you to look in the calm-- wait a second, i want you to look into it and tell our viewers that you are okay with doubling it, making 200 billion dollars a month. >> there we go, say it. i'll talk about fact and not ideology. deficits add to the savings and income of the private sector. it's an accounting identity, as a matter of accounting, that is it what happens. when the government spends, it adds to demand, which means we create more goods and services, which is a real wealth of the nation. and that's the true heritage of what's passed down to our kids and grandkids. that's how come. >> that's debt that's passed down. >> that's not debt. >> stuart: they've got to pay
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interest on it. >> the government, first of all, in terms of the government, yes, the government has a debt, but it's a very easy debt for the government to manage because it's in its own money and the government, it's simply an accounting entry on the book and the real wealth created is the real wealth. how else do you think you're going to look at it. >> stuart: i don't think you're going to win, telling the americans to double up on debt. i'm out of time. >> millions of people are going through difficulty and we could solve this if we-- >> more did debt. thank you for joining us. with uncertainty mounting, companies and banks now squirreling away 3 trillion dollars in cash. steve forbes on the one and only thing that will get them to spend it. and democrats daring republicans to go machete on the budget to fund the 700 billion dollar tax cut. our machete man already has. charles payne, machete man, he's next. and the first language, the language of chemistry,
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>> listen to this, companies and banks now sitting on 3 trillion dollars in cash, because of all the uncertainty. to the ceo, who knows what will get them spending again. steve forbes, what will it take, steve, to get 3 trillion to come into the economy? >> well, you hit the-- you hit it right with the word uncertainty. one is stabilize the dollar so people know what they're investing and what they can get back in the future. two, no more tax increases, freeze them all and then take obama care and the financial reform bill and as they suspend them for a hundred years. i've got a theory if the republicans win big in november, that we will be able to change course economically. do you agree? >> i think that's absolutely right and one of the things that's going to start to happen is they're going to start to peel away, already, people are now studying, okay, what happens after november
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2nd. how do we start to peel away this terrible health care bill and they're going to start with that 1099 provision that comes in 2013, $600 after filing 1099 for every transaction, over $600, that's the fuhrs thing to go. the president may try to veto it, but he's going to know he's falling into a trap for 2012 and the republicans will think that positive things are put on the table. what's wrong with the argument there's all of this slack in the economy and there is, why don't you get the government to spend more and get some demand back into the economy, and stimulate it that way. after all, if you have to borrow a ton of money and now is the time to borrow it because it's dirt cheap. what's wrong with that? >> what's wrong with that. why aren't the banks and companies do what they normally do. it's not normal to sit on cash. >> right. >> and the reason is, they're keeping interest rates artificially low. regulators come into banks and tell them raise are capital. less room to make loans and bank examiners give them a
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hard time if they make business loans and the president should get on the back of regulators and taxes are priced in a burden. if you keep raising the price you get less risk taking, so if the government spending worked, the soviet union would have won the cold war. >> look down the road, let's suppose we don't make a significant change, that the economy rumbles on as it has been. how long before we get, say, below 8% unemployment? >> oh, let's see, maybe when i'm 110. >> stuart: is it years? >> it is years and all you have to do is look at unemployment in europe where they have the same kind of regulatory tax regime that this president wants to put over here. they had very high unemployment. especially among younger people, underemployment. massive unemployment benefits, and very little enno evaluation the innovators came here and went to other countries because they couldn't get the capital and the right environment in europe. hello, we've seen this movie before. >> stuart: here i am. >> an unhappy ending. >> stuart: notice the accent, european, here i am. steve forbes, thank you very
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much indeed. >> thank you. >> federal agents. >> ruled by a sense of destiny, machete. >> stuart: you couldn't resist this, we just could not resist this. to the guy republicans need right now, no, not the machete, we're talking charlie. as democrats dare republican to slash 700 billion dollars from the budget to pay for an extension of the bush tax cuts for everybody, charles payne is ready to slash it all. >> they call me the machete man. how was that, okay? >> that was pretty good. >> a british accent. >> stuart: we say in a word, you say you come up with 763 billion dollars worth of cuts that you could do immediately. we're going to scroll them down the left side of the screen. >> absolutely, i think there was a lot more and i deliberate ily didn't put corporate welfare there, a slam-dunk easy one and defense
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spending ear marks in there. the harder stuff we're talking about. first of all shall the wage fraud abuse in medicare and medicaid, outrageous, 200 billion and be realistic get rid of 100 billion of that. subsidizing education. federal we need to get the federal government out of there. no child left behind and failures and k through 12 out of college. have you seen college tuition, stu. >> stuart: yes, as a matter of fact i have. >> it makes the housing bubble look like child play. people can't afford to go to school and let's get the government out of that as well. >> stuart: we'll go down the list and keep running on the side of the screen there. i put it to you charles, you can't just say cut this and cut that. do you think you could get this list through congress. >> you know what i'd put cola adjustments on there and i know my mother would probably throw the shoe at the skroo en0en this. no one can win if you talk about cost of living adjustments and social security and elderly folks, that's adjusted too high.
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this is about political will. this is why i didn't put the easy one on there like corporate welfare, you know, you make a great point, stu. there's got to be some will to get this done, but i believe at this point perhaps as no other time in this country except perhaps fighting the british, sorry, no offense, that-- >> it's not been a morning, you can say what you like. >> and people are ready to make the tough decisions e you think we're at that point. >> people are more prepared to than the politicians are. >> stuart: how donning did it take you with your machete. >> didn't take long, these are the things we've talked about and a lot of this stuff is done by think tanks before whether it's the heritage foundation and cato and others, you can get it done and in fact a lot more than this. >> stuart: it's extraordinary that 18 months ago when president obama first came into office we were all in favor of government, government spending, government was going to be the agent. you're telling me there is now a complete reversal of that national mood? >> i think that people were in favor of trying something
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different. and as they found that we were slipping off the foundations that made us great. they were worried and hit the panic button. we were ready to try something other than what we were doing and now we've come to realization that steve forbes pointed out. 3 trillion dollars on the sidelines and guess what's worse than that. the money that the people are holding on to. the american public. they say 700 billion dollars in june alone. what are they afraid of? this administration. >> 700 billion in june. we have a stimulus package in this country and we don't need any more schemes at all. >> machete man. >> you've got it, mate. >> and it's a combination of everything like jobs. >> and the people in four different continents. >> stuart: not me, baby. are republicans about to lose, even if they win? why the hammer says the gavel means nothing unless his fellow friends start showing it does. and, the mass raping of women in darfur, the stoning deaths of